Life is unpredictable, and protecting your family’s financial future is important. LIC Term Insurance is one of the most reliable ways to secure your loved ones in case of an untimely death. It is a pure life insurance plan, which provides a large sum assured to your family if you pass away during the policy term. Unlike other insurance policies, term insurance does not offer maturity benefits or investment returns — its main focus is protection.
In this blog, we will explain LIC term insurance in simple words, explore its benefits, plans, premiums, and include examples and calculations to help you understand better.
What is LIC Term Insurance?
A term insurance plan is a type of life insurance that provides financial security to your family if you die during the policy term. It is also called pure life cover, because it does not give any returns if you survive the policy term.
For example:
If a 30-year-old buys a LIC term plan with a sum assured of ₹50 lakh for 30 years and passes away during this period, the nominee will get ₹50 lakh as financial support. However, if the policyholder survives the term, there is no maturity benefit.
Key Points:
- Provides financial protection to family
- Offers high coverage at affordable premiums
- No maturity or investment benefit
Why Choose LIC Term Insurance?
LIC is India’s oldest and most trusted life insurance company, which makes its term plans highly popular. Here are a few reasons why LIC term insurance is a preferred choice:
- High Claim Settlement Ratio – LIC has a strong record of paying claims, giving peace of mind.
- Affordable Premiums – You can get high life cover at a low cost.
- Flexible Policy Terms – Choose the duration of your policy based on your financial goals.
- Tax Benefits – Premiums paid are eligible for tax deductions under Section 80C, and the death benefit is tax-free under Section 10(10D).
- Trusted Brand – LIC is widely recognized and trusted across India.
Key Features of LIC Term Insurance
Here are the main features of LIC term insurance that make it attractive:
| Feature | Details |
| High Life Cover | Offers a large sum assured at an affordable premium. |
| Flexible Policy Term | Choose a term from 5 years up to 40 years. |
| Multiple Premium Options | Regular pay, limited pay, or single pay depending on the plan. |
| Tax Benefits | Section 80C and Section 10(10D) for premiums and death benefit. |
| Optional Riders | Accidental death benefit or critical illness rider for extra protection. |
Popular LIC Term Insurance Plans
LIC offers several term insurance plans to meet different needs. Some popular plans are:
1. LIC Digi Term Plan
A fully online plan with high life cover and simple digital purchase.
2. LIC Digi Credit Life
Specifically designed to cover loans and credits in case of sudden death.
3. LIC Yuva Term Plan
Affordable term plan for young adults with flexible coverage.
4. LIC New Tech-Term Plan
Offers flexible death benefits and multiple coverage options.
5. LIC New Jeevan Amar
Traditional term plan with customizable benefits and long policy term.
6. LIC Saral Jeevan Bima
Simple and straightforward plan suitable for low-cost life cover.
How LIC Term Insurance Works
Buying a LIC term insurance plan is simple. Here’s the step-by-step process:
- Choose the right plan based on your age, income, and responsibilities.
- Select sum assured – the amount you want your nominee to receive.
- Choose policy term – how many years the policy should run.
- Decide premium mode – annual, half-yearly, quarterly, or monthly.
- Pay the premium and keep the policy documents safe.
- Claim settlement – in case of death, LIC pays the sum assured to the nominee.
Premium Calculation Example
Let’s understand LIC term insurance premiums with a simple example:
Example:
- Age: 30 years
- Policy Term: 30 years
- Sum Assured: ₹50,00,000
- Annual Premium (approx.): ₹15,000
This means the policyholder pays ₹15,000 every year for 30 years. If the person passes away during the term, the nominee will get ₹50 lakh.
Break-even calculation:
- Total premiums paid in 30 years: 15,000 × 30 = ₹4,50,000
- Death benefit: ₹50,00,000
- Net benefit: ₹50,00,000 − ₹4,50,000 = ₹45,50,000
This calculation shows how term insurance offers high protection at low cost.
Benefits of LIC Term Insurance
1. Financial Security for Family
If the policyholder dies unexpectedly, the family receives a large sum assured to maintain their lifestyle and meet financial needs.
2. Affordable Premiums
Term plans are cheaper than endowment or money-back plans because they focus only on life cover.
3. Customizable Coverage
Choose coverage based on responsibilities, income, and financial goals.
4. Tax Savings
Premiums are tax-deductible under Section 80C, and the death benefit is tax-free.
5. Optional Riders
Add extra protection with riders like:
- Accidental Death Benefit
- Critical Illness Rider
Who Should Buy LIC Term Insurance?
LIC term insurance is suitable for:
- Working professionals with dependents
- Parents with children
- Individuals with loans and financial responsibilities
- Anyone looking for high life cover at affordable rates
Exclusions in LIC Term Insurance
It’s important to know situations where LIC may not pay the claim:
- Suicide within the first 12 months of policy issuance
- Death due to illegal activities or criminal acts
- Non-disclosure of critical health conditions
LIC Term Insurance vs Other Life Insurance Plans
| Feature | LIC Term Insurance | Endowment / Money-back Plans |
| Purpose | Pure life cover | Life cover + savings/investment |
| Premium | Low | High |
| Risk Protection | High | Moderate |
| Maturity Benefit | None | Yes |
| Tax Benefit | Yes | Yes |
Conclusion: Term insurance is best if your primary goal is protection, while endowment plans suit those looking for savings and investment along with life cover.
Also Read: TataAIG: Its Insurance Plans, Benefits, and Features
Tips to Choose the Right LIC Term Plan
- Start early – premiums are lower for younger policyholders.
- Choose adequate sum assured – ideally 10–15 times your annual income.
- Select appropriate term – cover until your dependents are financially independent.
- Consider riders – for extra protection in accidents or critical illness.
- Compare plans online – LIC offers multiple term plans for different needs.
Conclusion
LIC Term Insurance is a simple, affordable, and reliable way to ensure your family’s financial security. It provides high life cover at low premiums, offers tax benefits, and has a strong claim settlement record. By choosing the right term plan and sum assured, you can protect your family against uncertainties and enjoy peace of mind.
If you haven’t considered a term plan yet, start today — the sooner you buy, the lower the premium and the greater the benefit to your family.